Activision Blizzard’s (NASDAQ: ATVI) Blizzard Entertainment division announced that it had signed a licensing agreement for World of Warcraft in mainland China, with a division of NetEase, Inc. (NASDAQ: NTES). The agreement picks up for another 3 years time at the expiration of the current agreement. The companies announced a partnership for Warcraft, Starcraft, and the Battle.net platform last summer.

The release notes that additional information on the transition plan can be found at http://wow.163.com/ (site in Chinese.) World of Warcraft’s is currently licensed by rival The9 Limited (NASDAQ: NCTY) and is set to expire on June 8. The9′s stock plunged 25% after the announcement, reported Reuters.

As reported last month, Activision Blizzard has been battling Chinese censors to get approvals for the Wrath of the Lich King, the new chapter of Warcraft. This has mostly been seen as a thinly veiled attempt to frustrate some of the 3 million plus Chinese WoW gamers into trying domestic games. Perhaps a new partner will help them move things along.

eBay (NASDAQ:EBAY) has consolidated the online marketplaces of South Korea by buying competitor GMarket (NASDAQ:GMKT) for $24 a share or about $1.2B. According to the Motley Fool, eBay has the majority of the shareholders in favor so all that’s left is the clearance of South Korea’s antitrust authorities. This approval includes that of Yahoo (YHOO), which owns 10% or about $120 mm worth. Gmarket will merge with Internet Auction Corporation (IAC), eBay’s 2001 acquisition that provided entry in to the world’s 6th largest market. The press release touts not just the combined volume of the two companies, but also significant synergies due to the differences in product focus and audience.

IAC generated $2.2 billion of gross merchandise volume in 2008 and revenue of $161.2 million at an assumed exchange rate of 1262 KRW per USD. In 2008, Gmarket generated $3.2 billion of gross merchandise volume and revenue of $220.8 million at the same assumed exchange rate.

NetEase.com (NASDAQ: NTES) launched 163.com, new email service to provide a single-login for its users who had previously established accounts under one of the company’s five brands (163.com, 126.com, yeah.net, vip.163.com, and vip.188.com). According to information provided by the company, it has an email user base of 300 million in total, and it sees 400,000 new email users per day, 280 newly registered users per minute, and 4,000 requests for email sending per second.

While this “consolidation” of sorts will help establish Netease.com’s position as the leading provider of email in China, it will have little impact on the company’s financial performance. In Asia where Internet penetration rates of approximately 15% lag the world average of 22% and are far behind the US at 74%, building a substantial email platform seems a bit overkill. In China, text messaging is the predominant form of digital communication with 650 million mobile phone users. This platform will only gain momentum with the 3G networks that are currently being built by the major mobile phone operators– China Telecom (NYSE: CHA), China Unicom (NYSE: CHU) and China Mobile (NYSE: CML).

Netease.com seems to be conducting some internal housekeeping by restructuring some of the company operations and business units. According to a piece on SinoCast Daily Business Beat (and others citing www.enet.com.cn), the company is considering spinning off its Internet portal business and listing it on the public markets. No timetable was provided.

No doubt the recent success of the Changyou.com (NASDAQ: CYOU) listing on the NASDAQ in which the company raised over US$128 million, has caught the attention of other Chinese online gaming companies that may be looking for capital.

According to a company press release, Shanda Interactive Entertainment Limited (NASDAQ: SNDA) announced that its wholly-owned subsidiary Shanda Games Limited plans to start commercial launch of AION: The Tower of Eternity (“AION”), a highly anticipated massively multiplayer online role-playing game (MMORPG) in its games portfolio.

Since the launch of unlimited closed-beta testing on April 8, 2009, AION has been well received by players on the strength of its elaborate graphic design and innovative game play. On the first day of testing, Shanda Games opened 80 servers for AION to meet increasing player demands. Shanda Games will offer the commercialized version of AION entitled “Dragon Fortress” starting April 16, 2009.

As a visually stunning fantasy 3D MMORPG, AION has received much acclaim and multiple awards since its release in Korea. The game was selected as the “Most Anticipated Online Game in 2009″ at the 2008 China Game Industry Annual Conference and the “Most Anticipated Online Game of the Year” at the 2008 Annual Conference of the Chinese e-Game Industry. Both these awards are considered among the most prestigious within China’s online game industry.

In related company press release (Xinhua), Shanda’s authorized game, Avion, popularly known as the Korean World of Warcraft by online gamers, has just received approval by relative authorities. According to people familiar with the matter, Shanda will adopt an hourly payment plan which differs from the current payment plan in China.

An open beta test of Avion, another MMORPG developed by Korean NCSoft and Shanda, drew more than 500,000 players and has been given exclusive authorization in China.

Today, Research and Markets announced a new 140-page report, “Online Games Market in China.” The company forecasts that “the online games market in China will exceed $5.5 billion in 2012. The market grew more than 63% to reach $2.8 billion in 2008.”

Allison Luong, our Managing Director said, “Trends to track in 2009 include the growth of social networking sites in China, with over 55 million users, and their cross-pollination with games. One overall concern is the lack of diversification with many game operators relying on a single title for the bulk of revenues. In addition, a glut of content with more than 200 games on the market, makes releasing a breakout hit increasingly difficult.”

Other key findings in the report include:

• China’s most popular online game, Netease’s “Fantasy Westward Journey” achieved 1.8 million peak concurrent users, followed by Giant’s “Zhengtu Online” with 1.5 million users, Tencent’s “Dungeon and Fighter” at 1.2 million users, and Blizzard’s “World of Warcraft” at 1 million.
• Game operators in China experienced strong revenue growth in 2008. Six game operators, Tencent (HKG: 0700), Changyou (NASDAQ: CYOU), The9 (NASDAQ: NCTY), Netease (NASDAQ: NTES), Shanda (NASDAQ: SNDA) and Giant (NYSE: GA) crossed the $200 million revenue mark.
• Approximately 70% of China’s 298 million Internet users are under the age of 30. This group is most likely to seek out online entertainment, including games, music, and chatting, which we believe will drive revenues for the online gaming market.